Mexico Vegetable Crops, a Backyard That Avoids Business Risks for American Vegetable Crop Producers.

For the last 15 years, the vegetables crop area in United States of America is shrinking while Mexico´s vegetables crop area is increasing. Although Mexican people eat less vegetables products per capita than American people and their population rate is 0.4 to 1, respectively. From 1992 to 2012, USA vegetables crop area loose 221,669 ha while Mexico`s gained 150,281 ha. The American horticulture market has been increasingly supplied by vegetable products produced abroad, particularly from México. From this country 1.3 million tons were bought in 2011. At the same time, from 1999 to 2012, total production of vegetables in USA has reached a plateau of 37.1 million tons. It means that an increasing fraction of vegetables needed for the American market are now produced in Mexico. This phenomenon has been promoted by the high risks involved in the production of this type of agriculture products. The risk is that capital put into the vegetable production is not easily recovered due low price, having producers big loses. This type of agriculture products are highly affected by demand and offer and because they cannot be stored for long periods. To reduce the risk, a lot of American farmers or companies have decided to translate their vegetables production to Mexico, where the production cost are lower due to the cost of labor (USA$ 8.00 per worker per day), lower cost of land (rent or acquisition), lower cost of water and transportation and weak environmental and labor laws. The production techniques among the two countries, for competing for the same market, San Diego-Los Angeles metropolitan area and elsewhere, are also different. On Mexico side, vegetable production is labor intensity, using greenhouses, nethouses and vegetables on fields that require a lot man. On the USA side vegetables are produced on the fields using a lot of machinery and much less labor, greenhouses or nethouses are so difficult to find. This trend is going to continue into the next years due that vegetables production cost in America are going to continue to increase, and, cost of labor in Mexico, principally, is not going to increase, at least relatively. The risk of vegetables production in Mexico is much lower due to the low cost of labor, water and land and weak environmental and labor protection laws.